Problem 2-17 Schedule of Cost of Goods Manufactured; Income Statement; Cost Behaviour [LO1, LO2, LO3, LO4, LO5]

The following information pertains to the most recent quarter at Precious Production Limited.

Purchases of raw materials	$	375,000
Raw materials inventory, beginning		44,000
Raw materials inventory, ending		73,000
Depreciation, factory		193,000
Insurance, factory		21,000
Direct labour		247,000
Maintenance, factory		124,000
Administrative expenses		288,000
Sales		2,040,000
Utilities, factory		113,000
Supplies, factory		4,100
Selling expenses		329,000
Indirect labour		267,000
Work in process inventory, beginning		28,500
Work in process inventory, ending		122,000
Finished goods inventory, beginning		41,500
Finished goods inventory, ending		166,000

Required:

1. Prepare a schedule of cost of goods manufactured.

2. Prepare an income statement.

3. Assume that the company produced the equivalent of 20,000 units of product during the year. What was the average cost per unit for direct labour? What was the average cost per unit for factory insurance? (Round your answers to 2 decimal places.)

4. Assume that the company expects to produce 22,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory insurance? (In preparing your answer, assume that direct materials is a variable cost and that insurance is a fixed cost; also assume that insurance is computed on a straight-line basis.) (Do not round intermediate calculations. Round "Average cost per unit" answers to 2 decimal places.)

5. Not available in Connect.

6. Assuming the company produced 27,000 fully and partially finished units during the year, determine the cost components of the finished goods inventory, which is composed of 5,400 finished units.